Tiny sports store dies in fight for its name Dick's Sporting Goods thought it had a case against 72-store chain

Trademarks

June 28, 1998|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

What's in a name?

The demise of a small business, if it's not protected.

That has become the story of Gary Richard Shank, the former owner of a 27-year-old fishing, hunting and sporting goods shop in Essex. He has gone out of business, snuffed out by a 72-store chain that began opening stores in Maryland three years ago, he said.

The latter is Shank's store started by his father, Richard. The store never grossed more than $700,000 in annual sales or spent more than $5,500 annually in advertising.

The former is a privately held company that had $550 million in sales last year and is based in Coraopolis, Pa. It operates five stores in Maryland -- in White Marsh, Glen Burnie, Hunt Valley, Columbia and Bel Air -- and plans to add more, company officials said.

The cavernous 55,000-square-foot buildings sell camping, fishing and hunting gear, sports shoes, professional and college team-licensed merchandise and exercise equipment. They are commonly called Dick's or Dick's Sporting Goods in advertisements.

No one would confuse the two stores had not their names been so similar. And that set the stage for Shank to sue Dick's Clothing & Sporting Goods for trade name infringement, unfair competition and intentional infliction of emotional distress.

"They don't know who they are," Shank said of his competitor. "I don't think it's too much to ask for them to use their name and not mine."

The ordeal has lasted more than 2 1/2 years and teaches a lesson in the basics of owning a small business, experts said.

For a business owner, having a company or product name trademarked can be one of his most important assets, said Griffith Price, an attorney specializing in trademark law at Finnegan Henderson, a Washington law firm.

"The most important part of business planning is trademark protection," said Price, who is the chairman of the trademark committee of the American Intellectual Property Law Association. "Trademark cases are not common, but they are a part of doing business."

McDonald's Corp. won a trademark lawsuit in 1988 after it sued the Quality Inns hotel chain for using the name "McSleep Inns" for its new chain of budget hotels. The federal district judge ruled the use of "Mc" was a trademark held by the fast food company.

More recently, designer Ralph Lauren's company, Polo Ralph Lauren Corp., has sued to force the 22-year-old magazine of the U.S. Polo Association to drop the name Polo. A trial is scheduled for December.

If a company is not registered with the U.S. Patent and Trademark Office, it may claim "common law" rights to a name, meaning it has claimed the sole right to the company or product name simply by using it.

Yet, in common law cases, once a trademark-infringement lawsuit develops, it's up to the court to decide who owns the right, said Roxanne Beausoleil, a member of the International Trademark Association and assistant general counsel with Fila USA in Sparks.

"It's easier [to have a trademark] than trying to assert your right to a name after the fact," she said. "It's always the smarter move to build up a wall of protection around you."

Without a trademark, but believing he had common law rights to the names "Dick's" and "Dick's Sporting Goods," Shank filed suit against his competitor in U.S. District Court in Baltimore in February 1996.

Mistaken identity

In his court filing, he said he received nearly 50 phone calls a day from consumers asking for directions or about items in stock XTC because they had mistaken his store for Dick's Clothing & Sporting Goods.

The mistaken identity took its final toll when Shank began losing business, mainly because some of his customers thought he had closed his Essex store to open the chain.

Steven K. Fedder of Rudnick & Wolfe, the law firm in Washington that represents Dick's Clothing & Sporting Goods, said his client never considered Shank's case to be a nuisance suit.

"Considering we had a federally registered trademark and he didn't, and considering his size, I would not have expected him to make the decision to file the lawsuit," Fedder said.

"But we believed the suit raised serious questions," he said. "We thought we had the right positions. The plaintiff thought he was protecting his property, but he was dead wrong."

On March 31, Shank lost his court battle on grounds that he had not established common law rights to the names.

He has closed his store.

But the case is not over. Dick's Clothing & Sporting Goods is seeking $273,081 from Shank for its legal fees and other expenses. Shank's attorneys have filed an appeal of the decision and the motion to pay the sum.

Mediation on the issue will continue next month, Fedder said.

"One of the prized possessions of a small business is its good name," said Jim Weidman, spokesman for the National Federation of Independent Business, based in Washington.